Morgan Stanley is cutting jobs from its currency and rates trading businesses in response to the slowdown in those markets, the firm's chief executive has said.

Speaking at Morgan Stanley's Financials Conference in New York, CEO James Gorman noted the firm had moved to "optimise" the head count at its so-called macro businesses as it copes with a slowdown in client activity and retreats from areas outside its core business.

"We've been through another recent undertaking where we've been optimising our front and back-office head count, reflecting what we think is our opportunity set across foreign exchange and rates," Gorman said.

Fewer than 100 employees were affected by the cutbacks, a person familiar with the matter said, and some were offered other jobs inside the firm. Morgan Stanley has shed traders and salespeople, as well as employees who provide back-office support.

The cuts will affect the businesses' revenue "modestly," but help boost returns, Gorman said.

Gorman joined other senior executives in acknowledging the effect unusually calm markets have had on their trading businesses. Clients are trading less, and the prices of many securities, from stocks to currencies, have turned less volatile—leaving banks' traders fewer opportunities to profit from those swings.

In another sign of the belt-tightening across Wall Street, Gorman revealed new targets on expenses for employee pay. He also reiterated an old target on the firm's returns for 2015 and beyond.

He said expenses from pay and benefits at the firm's securities and investment-management divisions should comprise less than 40% of each unit's revenue. The so-called compensation ratio should fall below 55% at Morgan Stanley's wealth-management arm, Gorman said.